An Audit Report on Selected State-funded Student Financial Aid Programs at Seven Higher Education Institutions and the Higher Education Coordinating Board
November 2009
Report Number 10-015
Overall Conclusion
The seven higher education institutions audited substantially complied with requirements for awarding funds from state-funded student financial aid programs. These requirements included state statutes, Higher Education Coordinating Board (Coordinating Board) rules, and institutional policies.
However, the Coordinating Board should provide additional oversight over the B-On-Time (BOT) loan program and the Towards EXcellence, Access, and Success (TEXAS) grant program. For the Texas Public Education Grant (TPEG) program, which is administered at the institutional level and not overseen by the Coordinating Board, improvements are needed in the institutions' calculations of tuition amounts to be set aside for this program.
For the state-funded student financial aid programs audited, the following specific opportunities for improvement were identified:
- To help ensure compliance with requirements for awarding funds from state-funded student financial aid programs, institutions should improve system edit checks and develop detailed policies and procedures.
- The Coordinating Board should provide guidance to institutions and monitor institutions' calculations and transfers of tuition revenue that they set aside for the BOT program (these amounts are referred to as "tuition set-asides"). For example, Texas A&M International University did not transfer tuition set-asides totaling $215,964 for BOT to the Office of the Comptroller of Public Accounts for fiscal years 2006 through 2008 until June 2009.
- Institutions and the Coordinating Board should strengthen processes to ensure that BOT loans are forgiven in accordance with statutory requirements.
- Three of the seven institutions did not accurately calculate tuition set-aside amounts for the TPEG program in accordance with statutory requirements. For fiscal year 2009:
-- Texas A&M International University should have set aside $949,827, but instead it set aside $783,234.
-- Texas Woman's University should have set aside $1,745,059, but instead it set aside $2,089,342.
--Texas A&M University - Corpus Christi should have set aside $1,413,672, but instead it set aside $1,450,193.
The methods that the Coordinating Board used to allocate and distribute funds for grants and loans to institutions were reasonable, and controls over the related systems were adequate. However, the Coordinating Board should strengthen its written policies and procedures for the calculations it uses to allocate funds for TEXAS grants and the College Access Loan (CAL) program to institutions. The Coordinating Board did not allocate funds for new BOT loans during the scope of this audit; instead, it instructed institutions to award only renewals of BOT loans to eligible students. The Coordinating Board does not allocate TPEG funds to institutions because that program is administered entirely at the institution level.
The Coordinating Board has adequate information technology controls over student financial aid systems to provide accurate information for the state-funded student financial aid programs audited. However, it should make certain improvements in edit checks, password management, and user access.
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